Funding Travel

[trimatty471]

One of my goals go retirement is slow travel long travel (2 weeks to a month) per year. However, I do not want to wait until retirement (can be 6 - 9 years away early retirement or 19 years for traditional retirement) to start. I currently have 5 weeks vacation per year. I am thinking of putting money away in a an etf to fund this goal. I have a brokerage account with Vanguard. What account would it make sense to park these funds.

[tcu2003]

I just use our savings account. I could invest it, but if the market were down, then I’d feel bad pulling the funds out.

That said, I also try to just cash flow as much of it as possible.

[resolution]

I keep my short term money in VMFXX (Vanguard federal money market), and longer term money, in VTSAX (vanguard total stock market index), which is the mutual fund version of VTI. The money market doesn't earn as much, but there have been times that I needed to raid the brokerage for large purchases while the market was down, and I was glad that I had the money market funds so I could avoid selling stocks while the market was down.

If you are planning to use the money for travel in the next year or two, probably just keep it in Vanguard Federal Money Market Fund (VMFXX). It is paying 5.29% and it won't suddenly drop right before you need to cash it out to pay for a vacation. It's the default for the Vanguard brokerage settlement fund, so it should find its way there automatically if you just move the money from your bank to Vanguard.

If you are saving for travel for after you retire, maybe save in VTI so you can make larger gains while you are saving.

[Tiny]

I'm not sure if you are saving money to start doing some traveling (with your vacay time) in the next year or two OR if you are thinking of saving now to fund travel when you "retire" in 6 to 9 years. 

Here's what I do: 
I save a X dollars every month in a HYSA to pay for my yearly (or every other year) vacation/day trip/long weekend/some other fun event plans.  This is money I am saving to spend sooner or later.   No need to invest it. I just need it there so I don't incur credit card debt and pay interest OR experience anxiety about "how much" the vacation costs (how will I ever pay for this?? Why am I spending so much!?!).  Having pre-decided and then saved up some money for it - makes it easier to take a planned vacation/fun thing.     

For my "retirement" travel assumptions - I added a yearly travel expense to my "retirement yearly spending plan" and then used that to determine how much yearly income I might need when I retire and then used that to help me determine how much I was saving for retirement.  It might not be perfect, but it's good enough. 

Whatever you decide to do - come up with what you are saving up for and then DO IT (save up some, and go and have fun). 

[trimatty471]

Thank you!

I have money in HYSA every year for travel.  I am thinking long term.  VTI it is.